Boss Holdings Ltd & Anor v Grosvenor West End Properties & Anor

For leasehold enfranchisement, the statutory question is whether the premises, or at least a substantial part, were designed or adapted for living in at the date of the tenant’s notice. The court assesses the purpose of the design or adaptation in the premises’ then physical state. The test does not require immediate residential capability, but original residential design is insufficient if the premises have since been adapted for another use. A building rendered incapable of any use by grave dilapidation, or manifestly adapted for commercial use, may fail the definition. The inquiry is not a two-stage historical test. The separate qualification that the building be a house reasonably so called remains relevant, but its application was not required on these appeals.

These were two appeals concerning substantial Mayfair properties and the statutory right to acquire the freehold under section 2(1) of the Leasehold Reform Act 1967. In Boss, the upper floors had originally been residential but were vacant and gravely dilapidated. In Mallet, a former residence had been continuously used as commercial premises, apart from an ancillary caretaker’s flat. His Honour Judge Cowell dismissed both claims, holding that the properties were not designed or adapted for living in. The central issue was whether that statutory test required capability of residential occupation at the notice date, or instead preserved a historical inquiry into original residential design.

1. The appeals were dismissed unanimously. Laws LJ delivered the principal judgment. Carnwath LJ added observations, and Tuckey LJ agreed with both judgments.
2. Section 2(1) of the Leasehold Reform Act 1967 requires the court to ask whether the premises, or at least a substantial part of them, viewed at the date of the tenant’s notice, were designed or adapted for living in. The relevant question is whether residence was the purpose of the design or adaptation at that time. The provision does not impose a requirement that the premises then be capable of immediate residential occupation. Nor does it create the two-stage historical inquiry proposed by the appellants.
3. Original residential design does not determine the issue if the premises have since acquired a different character. The upper floors of 21 Upper Grosvenor Street were so gravely dilapidated that they were not designed or adapted for anything at the relevant date. Bourdon House was manifestly adapted for commercial use. Its ability to be occupied residentially with little further work, and the fact that its layout reflected its former residential use, did not satisfy section 2(1).
4. The words requiring the building to be a house reasonably so called remain a separate limitation, but it was unnecessary to decide their application after the first statutory requirement had failed. The fire analogy relied on by the appellants was unhelpful because the Rent Restriction Acts formed a wholly different statutory regime. Morleys (Birmingham) Ltd v Slater was therefore distinguishable.
5. Carnwath LJ observed that the Act should be construed as amended and as it now stood, rather than solely by reference to Parliament’s intention in 1967. The abolition of the former residence condition by section 138 of the Commonhold and Leasehold Reform Act 2002 affected the context. He also questioned reliance on Lord Fraser’s dissent in Tandon v Trustees of Spurgeons Homes, contrasting it with Lord Roskill’s leading speech and the majority approach.

• Court of Appeal (Civil Division): On 21 March 2006, the court dismissed both appeals and upheld the decisions below. [2006] EWCA Civ 594
• Central County Court: His Honour Judge Cowell dismissed both enfranchisement claims, holding that the properties were not houses within section 2(1) of the Leasehold Reform Act 1967. The Boss judgment was given on 16 May 2005 and the Mallet judgment on 23 November 2005.